Abstract
The relative return to strategies that augment inputs versus those that reduce inefficiencies remains a key open question for education policy in low-income countries. Using a new nationally-representative panel dataset of schools across 1297 villages in India, we show that the large public investments in education over the past decade have led to substantial improvements in input-based measures of school quality, but only a modest reduction in inefficiency as measured by teacher absence. In our data, 23.6% of teachers were absent during unannounced school visits, and we estimate that the salary cost of unauthorized teacher absence is $1.5billion/year. We find two robust correlations in the nationally-representative panel data that corroborate findings from smaller-scale experiments. First, reductions in student-teacher ratios are correlated with increased teacher absence. Second, increases in the frequency of school monitoring are strongly correlated with lower teacher absence. Using these results, we show that reducing inefficiencies by increasing the frequency of monitoring could be over ten times more cost effective at increasing the effective student-teacher ratio than hiring more teachers. Thus, policies that decrease the inefficiency of public education spending are likely to yield substantially higher marginal returns than those that augment inputs.
Highlights
Determining the optimal level and composition of public education spending is a key policy question in most low-income countries
The stronger relationship between teacher absence and student learning outcomes seen in columns 2 and 3 suggest that teacher absence is likely correlated with other measures of education governance at the state and district levels, and highlights why our preferred specifications are the ones with district fixed effects
We contribute towards understanding the impact of these substantial nationwide investments in primary education in India by constructing a unique nationally-representative panel data set on education quality in rural India
Summary
Determining the optimal level and composition of public education spending is a key policy question in most low-income countries. Our study of this nationwide campaign to improve school quality in India uses a new nationally-representative panel dataset of education inputs and outcomes that we collected in 2010 We constructed this dataset by revisiting a randomly-sampled subset of the villages originally surveyed in 2003 (see Kremer et al (2005)) and collecting detailed data on school facilities, teachers, community participation, monitoring visits by officials, and teacher absence rates. Using the most conservative panel-data estimates of the correlations between increased monitoring and reduced teacher absence, we estimate that improving school governance (by hiring more supervisory staff) could be over ten times more cost effective at increasing effective student-teacher ratio (net of teacher absence) than hiring more teachers These calculations suggest that the marginal returns to investing in an inefficiency-reduction strategy (through better monitoring and governance of the education system) are likely to be much higher than a typical input-augmentation strategy. To ensure that our sample was representative in 2010, and at the same time amenable to panel data analysis relative to 2003, we constructed the panel at the village level, with a new representative sample of schools drawn in the sampled villages. All the results reported in this paper are population weighted and are representative of the relevant geographic unit (state or all-India)
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